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Fueling or Following Growth? Causal Effects of Capital Inflows on Recipient Economies

Identifying the causal impact of capital inflows on growth and development has been a perennial challenge. This paper proposes a new way to investigate the effect of capital flows on recipient emerging and developing economies, using shift-share instruments and correcting for indirect flows. It find...

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Bibliographic Details
Main Author: End, Nicolas
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2024
Series:IMF Working Papers
Subjects:
Economic & Financial Crises & Disasters
Investments, Foreign
Finance
Portfolio Management
Short-term Capital Movements
Portfolio Investment
Economics: General
Current Account Adjustment
Balance Of Payments
Long-term Capital Movements
Exports And Imports
Informal Sector; Economics
International Economics
Economics Of Specific Sectors
Capital Flows
International Finance: General
Currency Crises
Capital Inflows
Financial Markets And The Macroeconomy
Institutional View On Capital Flows
Macroeconomics
Capital Movements
International Investment
Foreign Direct Investment
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:Identifying the causal impact of capital inflows on growth and development has been a perennial challenge. This paper proposes a new way to investigate the effect of capital flows on recipient emerging and developing economies, using shift-share instruments and correcting for indirect flows. It finds a significantly beneficial effect of loan and bond inflows on economic performance, which materializes after a few years. It also finds some confirmation that the absorptive capacity of recipient economies depends on their fundamentals
Physical Description:39 pages
ISBN:9798400265426

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